No Segregation Between Properly And Erroneously Awarded Amounts Meant Plaintiffs Lost The Full Amounts Of Their Awards For Compensatory Damages Of $1,289,000, Punitive Damages Of $1,289,000, Attorney Fees Of $2,385,773.70 and Costs Of $56,417.72
In Bevis v. Terrace View Partners, LP, Case No. D071849, (4th Dist., Div. 1 February 28, 2019) (unpublished), sixty-nine current and former residents of a mobile home park sued the park’s owners on allegations that they had failed to maintain the park in “good working order and condition” which created a nuisance that – along with high space rent increases – made it difficult or impossible for park residents to sell their mobile homes. The trial court denied Plaintiffs’ motion for class certification, but the parties agreed to try the case in phases, with the first phase involving 16 residents living in 10 of the spaces.
The jury in the first phase found the park owners liable and awarded plaintiffs $1,289,000 in compensatory damages ($759,000 in economic and $530,000 in noneconomic damages), plus $57 million in punitive damages. After the jury’s discharge, the trial court ruled on Plaintiffs’ cause of action for violation of Business and Professions Code section 17200 et seq. (unfair competition law (UCL)) - that a “catch-up” provision in Defendants’ long-term leases was in violation of the UCL in that the provision allowed for significant increases in rent at the end of a lease term. Finally, the trial court reduced the punitive damages award to match the compensatory damages - $1,289,000, and awarded attorney fees (with an enhancement to the lodestar) and costs of $2,385,773.70 and $56,417.72, respectively.
Plaintiffs were not happy about the almost $56 million reduction to their punitive damages award. Defendants disagreed with the judgment and post-judgment orders – contending that the judgment was not supported by the evidence or on a statutory basis, and that the court had abused its discretion in its findings. Defendants further claimed that the court had abused its discretion by awarding Plaintiffs’ full recovery of attorney fees despite their failure to prevail on some of their claims, by not reducing Plaintiffs’ fee award by amounts billed for unadjudicated claims and the unsuccessful class certification motion, and the unavailability of attorney fees award for the UCL cause of action – that the court had also erred in awarding an enhancement to the lodestar amount. Plaintiffs and Defendants appealed.
The 4/1 DCA reversed in part, and remanded certain viable claims for new trial. However, here’s the sticky wicket – the 4/1 DCA found that the majority of the awarded compensatory damages were for Plaintiffs’ claims based on unreasonably high rent, but that absent a rent-control ordinance (which did not exist here), Defendants could not be limited to charging a lower rent than their rental agreements allowed. In reversing judgment as to these claims, the 4/1 DCA also sought to reverse the related compensatory damages. Unfortunately for Plaintiffs, the jury verdict forms did not segregate the economic damages by category – leaving the 4/1 DCA unable to resolve the ambiguity between the properly and erroneously awarded amounts. Based on the ambiguity and the 4/1 DCA’s finding that the majority of the economic damages were based on the claims related to the high rent – and, therefore, erroneously awarded – the entire award went POOF!. This reversal also necessitated reversal of the punitive damages and attorney fees award.
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